fees -comm ass'n
(Fees discussed here do not include annual or special assessments.)
As a general rule, an association may only charge a fee to an owner if the fee is specifically authorized in the CC&Rs or bylaws or in the law.
Fees Authorized by Law
The law authorizes an association to charge a fee to an owner for:
- providing a statement of unpaid assessments (not to exceed $25) (see Utah Code § 57-8a-206),
- for the reasonable cost of the copies or electronic scans, and for time spent meeting with the owner, in complying with a request by the owner for records of the association. The fees may not exceed: (1) the actual cost that the association paid to a recognized third party duplicating service to make the copies or electronic scans, or (2) 10 cents per page and $15 per hour for the employee's, manager's, or other agent's time making the copies or electronic scans (see Utah Code § 57-8a-227(4)),
- collection costs and attorney fees incurred by the association in collecting an amount due from the owner (see Utah Code §§ 57-8a-301 & 306),
- interest on an unpaid assessment or fine at the rate provided in Utah Code Subsection 15-1-1(2) or in the governing documents, if they provide a different rate (see Utah Code § 57-8a-301(3)),
- the cost associated with reinstating a common utility service that the association terminated because the owner was delinquent, as provided in Utah Code § 57-8a-309 "Termination of a delinquent owner's rights."
The law authorizes a board to adopt a rule that institutes a fee for:
- a late payment of an assessment (a late fee), if not already authorized in the CC&Rs or bylaws,
- the use, rental, or operation of the common areas, except limited common areas,
- a service provided to an owner,
- a rental lot owner to use the common areas.
Fees Prohibited by Law
The law prohibits an association from charging a fee:
- to the owner of a rental lot just because the lot is a rental lot (see Utah Code § 57-8a-209(8) (an association may not require a unit owner to "pay an additional assessment, fine, or fee because the lot is a rental lot")), but an association that permits at least 35% of the lots to be rented may charge an owner who owns a rental lot an annual fee of up to $200 to defray the association's additional administrative expenses directly related to a rental lot, as detailed in an accounting provided to the owner (see Utah Code § 57-8a-209(9)(c);
- for review and approval of plans for the construction or improvement of a lot if the fee exceeds the actual cost of reviewing and approving the plans (see Utah Code § 57-8a-109); and
- for providing association payoff information needed in connection with the closing of an owner's financing, refinancing, or sale of the owner's lot, unless the fee is specifically authorized in the CC&Rs, bylaws, or rules. The fee may not exceed $50 and may not be required to be paid before closing. (See Utah Code § 57-8a-106.)
Otherwise, as a general matter, the CC&Rs or bylaws must contain authorization for any other fee an association charges to an owner.
Fees Should be for Costs Incurred, Not Common Expenses
Fees should always be reasonably related to the costs of providing the service or the value of the service that the fee is charged for, unless the CC&Rs state the fee does not have to be limited to such costs or value. This limitation is not stated in a Utah statute, but is an application of the association’s duty to treat the members of the association fairly. In other words, because of an association’s duty to treat its members fairly, fees should not be used to force a minority of the community to subsidize the benefits to the other members, unless the required number of members agree in an amendment to the CC&Rs. These principles come from common law, as stated in the Third Restatement of the Law, Property (Servitudes), not Utah statute.
So, as a matter of general practice, rather than being funded by fees, the common expenses of an association should be funded by regular assessments such that each owner pays a proportionate share of the common expenses in the proportions stated in the CC&Rs. But, the association can charge whatever fee is authorized in the recorded CC&Rs, regardless of actual costs, except where limited by statute.
See also Index, reinvestment fee covenant (for reinvestment fees (transfer fees)); and Index, attorney fees.
Statutes and Cases:
(For reference: 57-8 is the Condo Act, 57-8a is the Community Association Act, 16-6a is the Nonprofit Act)